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Five years' rise path of deep double price and multi pinduoduo: three fundamental problems and four underlying logic

via:博客园     time:2020/11/25 13:41:22     readed:127


Wen / chaos University

Source: Chaos University (ID: hundun University)

There are a lot of people to pinduoduo's sharing links, and some people are disgusted with the high imitations on pinduoduo. In this era of closed social relations and the supremacy of giants, pinduoduo always seems to be good at doing things in the opposite direction, and making great progress in questioning and ridiculing all the way.

However, the market has not fully understood the logic of pinduoduo's rise. Most people attribute the rise of pinduoduo to

The road of the rise of pinduoduo in five years may be one of the most worthy business cases in the Internet industry in China in recent years. It is true that this analysis is very difficult, we are here to do only a small attempt, and welcome more people with profound insight into this to join us in the discussion.

Pinduoduo is a very familiar, but also very controversial enterprise.

Its disputes mainly come from two aspects

1. Does pinduoduo's success come from its opportunism or its innovative practice?

2. Is Huang Zheng an innovator or, relying on opportunities and resources, unable to copy his success path?

With such a question, we try to double play the whole innovation path of pinduoduo, and what enlightenment can we bring to today.


Pinduoduo has not been established for a long time. We can divide it into three stages.

1. Direction exploration.

In 2007, Huang Zheng quit his high paying job at Google and returned to China to start a business. However, it was not until 2015 that his company started a new business. At that time, the e-commerce industry rose for many years, and Taobao, tmall, Jingdong and other giants had firmly occupied the market, but pinduoduo, with its special business model, forced itself into this almost saturated market. How did Huang Zheng do it?

2. Pinduoduo listed

In 2016, pinhaohuo and pinduoduo officially merged and listed on NASDAQ in July 2018, with a market value of $24 billion. It took less than two years for a start-up to go public on NASDAQ. What is the logic behind pinduoduo's miracle?

3. Transformation of pinduoduo

After going public, pinduoduo is facing great pressure from all sides, one of the most controversial is the issue of counterfeit goods. Looking back, pinduoduo has been advancing in the voice of doubt and ridicule. From the present to the future, how will pinduoduo's transformation be paved?


Next, we will focus on the above three issues, starting from four stages, to bring you the recovery of pinduoduo's growth model.

1. Looking for direction: break the shackles of the existing market space (direction innovation).

2. Edge entry: the low-end market matches the low-end supply chain (market innovation).

3. Connection Reengineering: from goods centered to human centered (mode innovation).

4. Inclusive value: pursuing both high quality and low price (innovation of value creation).

Looking for direction in saturated market

In 2007, Huang Zheng did not rush to start a business after leaving Google headquarters.

The first thing he did was to go to the counter of 3C small commodity market station and perceive the consumer market and customers in face-to-face communication with customers.

Half a year later, Huang Zheng set up a 3C e-commerce company ouku. From the limited information available, the company has been in operation for three years. Although it has a revenue of several hundred million yuan a year, it has hardly made any money due to the transparent market price of mobile phones. On the contrary, the gap between the company and Jingdong has been widening.

At an event attended by Liu Qiangdong and Huang Zheng, Huang mentioned his transformation ideas

At first, this sentence sounds like a surrender, but the last one is very intriguing.

Huang Zheng said that he and I (Liu Qiangdong) are two generations.


Huang Zheng thinks that ouku will easily fall into a meaningless consumption war with Jingdong in the future. Therefore, when Lanting Jishi made an offer to Huang Zheng in 2011, Huang Zheng sold ouku to Lanting Jishi at a good price, only retaining the technical team.

After selling Oku, Huang founded an e-commerce company

The question is, is there any room for China's e-commerce market to get involved?

In 2011, Jingdong and Ali actually occupied the majority of e-commerce.


By 2016, the market share of the two giants has further expanded.


At that time, many people in the industry were inclined to think that the competition of e-commerce track had been settled.

What can not be done in 2011, can still be done in 2016? Between the lightning flint, Huang took the pinduoduo prototype

Liang Ning once divided the portraits of Internet users into three categories: Daming, Benben and Xiaoxiao. Daming is a user who has a clear shopping goal. Stupid users, many of our female friends, went to Taobao to buy a sweater. After a long time of shopping, they didn't buy clothes and ordered a favorite lipstick. Another example is our leisure users, even do not have a clear shopping needs, just accidentally found a good thing, complete the order.

Compared with the shopping scene of searching for items on Taobao and Jingdong, it is undoubtedly the consumption scenarios of the latter two types of users that spell out the goods well.

This strategy can be seen in Huang Zheng's later speeches.


Huang Zheng said pinduoduo should combine Costco and Disney to integrate entertainment and consumption scenes together. From the later data statistics, pinduoduo's shopping scene is indeed like this.


Nearly half of pinduoduo users think that shopping on pinduoduo can be cheaper with acquaintances and can also recommend each other. There are also a large number of people think that shopping on pinduoduo is just like shopping. When you see the right one, you can also invite friends to join in the shopping and bargain.

Borrowing the huge traffic of WeChat, the good goods will enrich the shopping scene while greatly reducing the cost of customers, creating

However, behind the phenomenal growth, we believe that the most fundamental reason why social ecommerce can run through is that it is achieved in marketing

Generally speaking, if the traditional e-commerce wants to obtain the traffic, it must spend a lot of advertising fees, while the social e-commerce uses the mode of group social interaction, through the recommendation of friends and credit endorsement, to facilitate the order, thus saving a lot of advertising costs.

The platform can return part of the vacant advertising expenses to the platform merchants and users, and finally form a multi-party benefit situation.

In contrast, the market feedback shows that in the eight months since the official launch of spell goods in April 2015, the cumulative number of users has exceeded 10 million. In less than a year, there are about hundreds of companies that copy the mode of spell goods online. With its strong operational strength and product iteration ability, spell goods has become a great success.

In the face of the outbreak of good goods, I believe many entrepreneurs will have this idea


To paraphrase Mr. Lu Xun by a netizen

This is a new perspective of observation. When we look at the whole market as a red sea, it may indicate that it is time to change the rules of the game. Instead of looking for opportunities in the original plane, we should look for the possibility of changing the market structure.

The marginal market is always a fertile land for new entrants

It seems that Huang Zheng has found a new road. But if we compare today's pinduoduo with the goods at that time, we will find that there are many differences between them.

From MVP to giant pinduoduo, what adjustments has Huang Zheng made in his business logic?

Looking back on 2015-2016, several important changes have taken place in China's e-commerce market.

1. Cheap Internet and mobile phones.

Xiaomi released the first red rice mobile phone, which announced the end of China's cottage machine market. The continuous reduction of 4G network charges and the introduction of cheap and high-quality mobile phones into the market have provided a large number of cheap and available internet access tools for Chinese netizens.

2. New Internet users have emerged in large numbers in third to sixth tier cities.

Driven by the downward trend of mobile phone and network costs, the number of Internet users from the third to the sixth tier in China has increased dramatically. What are the characteristics of these new generation of Internet users? These people are already able to surf the Internet, but they are not proficient in online shopping.

As shown in the figure below, there is always a large gap between wechat active users and Alibaba active users.


3. Payment technology is becoming more and more mature.

WeChat payment and the popularity of Alipay provide the most important support for mobile shopping.

4. Low end supply chain spillover.

In 2015, Taobao launched a crackdown on fraud, saying

A large number of low-end supply chain enterprises that used to rely on Taobao and Jingdong have lost their foothold.

When the supply (low-end supply chain spillover) and demand (the rise of Internet users outside the Fifth Ring Road) and even (mature payment technology) have undergone great changes, how to integrate the supply and demand of Internet users outside the Fifth Ring Road and the low-end supply chain has become the inevitable way to the marginal rise of pinduoduo.


In September 2015, pinduoduo app was launched quickly on the basis of the verification of the logic of "spell goods" social e-commerce.

In two weeks, the number of fans exceeded one million, and after four months, there were more than ten million paying users. After that, many people are familiar with it. Pinduoduo has become the third pole of China's e-commerce market in the posture of black horse, and its data keeps climbing, even surpassing many mature e-commerce platforms.

In 2018, the two brands, pinhaohuo and pinduoduo, were officially merged. After completing their mission, they stepped back to become a sub brand of pinduoduo.

What can we learn in the process? I think there are two important implications.

1. From MVP to business model, it is not scaled up.

The core function of MVP is to verify logic. Once the logic runs through, it does not mean that it can be scaled up to your business model. We can see from the cases of "pinduoduo" and "pinduoduo", that pinduoduo is actually a re evaluation of the relationship between supply and demand in the market, and finally decides to enter the market by way of cutting into the low-end market.

2. The marginal market is always a fertile land for new entrants.

Huang Zheng once said that in the first two or three years of pinduoduo's establishment, there were basically no competitors. Why are there no rivals? Because pinduoduo's user pool is almost independent of the traffic of Taobao and Jingdong, and does not affect each other. Mainstream e-commerce has no energy or willingness to interfere in this part of the market.

Tiger sniff once had a report that commented on pinduoduo. I think it is very pertinent. This article says that pinduoduo has not taken away the original users of Taobao, but that pinduoduo has actually expanded the user plate of the entire e-commerce business and realized the real popularization in the marginal sense.

Therefore, for most of us entrepreneurs, if we want to avoid the attack of giants, we may have to do some work that the giants feel worthless, low profit and hard and tired for a period of time.

When we integrate these inefficient things that we are not willing to get involved in, it is possible to open a new business model and obtain a new market.

The reconstruction of connection logic is the fundamental reason for pinduoduo's rapid growth

We have a lot of entrepreneurs who have completed the construction and layout of the business model, and have made small achievements in their own field, but there is still a big gap between them.

On the contrary, pinduoduo's performance after listing has met the expectations of the public. It took Jingdong ten years, Taobao five years and pinduoduo only two years for Gmv from 0 to 100 billion.

In this world, there are many industrious and intelligent people, but few people have reached the summit. Behind the magic growth of pinduoduo, what is worth thinking about.

As Haier Group Chairman, Chief Executive Officer Zhang Ruimin said


In my opinion, the old and new logic of e-commerce has undeniably changed.

Under the old logic of connection, supply is scarce, so people have to look for goods.

Under the new logic of connection, supply is sufficient, so the goods have to find people.


In the agricultural era, due to the low productivity, our social products can only meet the consumption needs of some people. Good food and arts and crafts are specially provided for the nobility and the royal family. The common people can't use any good things. At this stage, the quality and quantity of our products are scarce.

During the industrial revolution, we liberated manpower with machines, carried out large-scale social production, and a large number of low-cost standardized products were sent to ordinary people, such as Ford's Model T. Only after the production of products is standardized, can the cost be reduced, so that every ordinary family can get on the bus. This is the logic of supply and demand in the industrial era. At this stage, the quantity of supply is sufficient, but the quality of supply is scarce.

At this stage, improving the quality of supply above the quantity of supply is undoubtedly the core logic of the next business. Behind the magic growth of pinduoduo is the logical change from TBC to DCB.

As Huang Zheng said, pinduoduo is

Taobao is the flow logic, the main body is search. Users have to find their own products, so they need a large number of SKUs to meet the long tail demand; pinduoduo represents matching and recommends products to consumers. SKUs are limited, but they should meet the needs of rich structure.

Social e-commerce, in fact, is a kind of business logic with people as the core. Therefore, Huang Zheng said that pinduoduo wants to create a unique shopping platform, a platform for group differentiation based on human dimension.

I think this sentence has not been fully explained. To be more accurate, pinduoduo is not only a platform for a person to be divided into groups, but also a re division of a person in different consumption scenarios.

Many people say that what pinduoduo is doing is the innovation of people outside the Fifth Ring Road. I think this logic is out of date. In the future, pinduoduo's market will continue to rise. As Huang Zheng said, pinduoduo should pursue high cost performance. Users of our platform can not only be very generous when starting luxury goods, but also compare the price of a box of fruit among three companies.


So we see that pinduoduo used a very typical low-end destruction model in the second step of innovation. But when it came to the third step, we found a new derivative of its value dimension

At the same time, we believe that a new value network prototype has been formed in pinduoduo's business model.

The star sea of pinduoduo: pursuing inclusive value

In addition to looking for a new value network, pinduoduo after the listing also faced the pressure of public opinion from all sides, fake goods, low-end labels are still attached to pinduoduo.

Many organizations have offered pinduoduo

But if we think from Huang Zheng's point of view, we have to go back to a core problem

The key word pinduoduo defines his vision for the future is called

What is inclusive?

First, Pratt Whitney needs to make Internet technology benefit more people and more scenes.

According to the latest statistics, China's total network retail sales and total social zero, the gap is still large. In other words, the seemingly booming Internet ecommerce is still a long way from the true popularity of the whole society.

Second, it should be cost-effective. We should use high-quality, low-cost way to realize the universal supply of the supply chain to the whole society, buy better products with less money, and improve the happiness of the whole people.

In our inherent thinking, good things must be expensive. The extra profit brought by high price can feed back the product development and promote the continuous iteration of the product.

This logic does sound right. But if we expand our perspective, we can start from the agricultural era, when the social products were crude in technology, and the slightly better things could only be provided to the nobles and the royal families, which were expensive. In the industrial age, machines liberated manpower, and large-scale standardized cheap and high-quality products entered the homes of ordinary people. In the information age, this trend will undoubtedly continue.

The core factor of driving animals to be beautiful and cheap is not the cost of enterprise research and development, but the improvement of industrial chain cooperation efficiency.

Huang Zheng once gave an example.

A man in the summer had a hunch that this winter would be a cold winter, so he placed an order for 1000 down coats from the manufacturer.

After getting the order, the manufacturer said, first of all, you need to pay a 10% deposit in advance. Secondly, as a benefit of placing an order in advance, I can give you a 30% discount on the whole order. Where does this 30% discount come from?

People familiar with factory cost management may know that if the order can be confirmed for a long time in advance, in fact, the factory can use leisure time or low time to produce some products that are not in a hurry to deliver. This scheduling mechanism can effectively help manufacturers to save costs. Including the upstream material order, if the order is given in advance, the cost will be reduced accordingly.

Huang Zheng explained that there are certain waste links in the traditional supply chain model. A large number of supply side manufacturers, in fact, have no way to obtain stable batch orders, so their production is unplanned and scattered, and they often adjust their production rhythm at any time according to the uncertain demand transmitted from the front end. In this way, the cost of production must be the highest. If the cost can not be lowered and the price can not be raised, a vicious circle will be created. A large number of low-end products will gradually fill the so-called counterfeit market.

and the new supply chain can be more efficient. Huang Zheng named the process

On the one hand, pinduoduo integrates a large number of scattered customer demands and delivers them to the supply side in a planned way, so as to provide manufacturers with certain production certainty and planning.

As we have mentioned above, because of this certainty, manufacturers can layout and optimize existing production resources to minimize production costs. This cost reduces some of the extruding profits and can even be fed back to the user so that the product is finally realized

On the other hand, manufacturers do not understand customer and market demand, do not know how to innovate, only from the perspective of low-cost competition dilemma will be eased.

As a platform, pinduoduo can package customer demand, customer portrait to the supply side to help the supply side to improve product design, so as to truly mobilize the efficiency of the overall synergy of the industrial chain, such as pinduoduo launched

So we see that early tmall is actually a phenomenon in the process, we think it is a tactic. So for pinduoduo, its transformation must not be to become a better tmall, but to create a new value network.

In this new network, our supply side and demand side are fully linked to achieve good product supply and low-cost supply at the same time. Then the ultimate realization of the so-called "inclusive" in its mission vision can bring our users, our consumers, that is, our people, a sense of satisfaction, a sense of gain and a sense of happiness.

The answer to the opening question: look for opportunities in the gap, and continue to evolve in uncertainty

Back to the beginning of our initial question: is pinduoduo's success opportunism or innovative practice? I think the capital markets have given it the most honest answer. And for Huang Zheng himself, there are undoubtedly many places worthy of our in-depth observation and thinking.

Finally, a few summary to share with you.

1. Uncertainty is the basis of our business judgment.

Many entrepreneurs howl in the face of the national epidemic. But in fact, there are so many uncertainties in society, and the uneasiness brought about by the epidemic may be a microcosm of the nature of this society.

Uncertainty is the norm of society. As an entrepreneur and entrepreneur, this is a prerequisite for us to acquire tomorrow.

The world is uncertain and incomplete. We should regard it as a basic judgment, and on this basis, we should build a judgment on the future business.

2. How to benefit from uncertainty?

In fact, we can see that Huang Zheng and pinduoduo have achieved rapid growth in a short period of time after they have captured the clues of the changes in the environment and stepped on the rhythm of changes.

Any great enterprise is iterative in essence, and the essence of business is also a process of continuous innovation. Continuous innovation and evolution are the only way to deal with uncertainty.

3. Innovation needs anchors.

If we are going to do continuous innovation, we can't innovate at will. First of all, we should set up an anchor of innovation, a long-term benchmark, and focus on the pursuit of long-term value.

Duan Yongping once warned Huang Zheng that doing things fast is slow and slow is fast. To do things with a normal mind, consider the promotion of their long-term value. Although the uncertainty factors of various external environment will lead to the deviation between price and value, in the long run, price will tend to value. If your value increases, you will eventually get the price you want. So we need to focus on the pursuit of long-term value.

Therefore, my third insight is that if we want to carry out continuous evolution and continuous innovation, we must have an anchor point that can firmly anchor us. It is an investment in long-term value, a reverence for business common sense, and a grasp of every moment at the moment.

4. The sense of mission has never been so important.

It is not difficult to find that the new generation of entrepreneurs, whether Huang Zheng or Wang Xing or Zhang Yiming, embody a strong sense of social mission, regard long-term social value as a personal mission, gather a large number of followers, and complete a great cause together.

A great enterprise must consider its own value from the perspective of social value. Only by thinking deeply about social value can we promote the continuous development of our enterprise itself, and make our team go more determined and long-term.

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